AutoNation pulls out of Pendragon bidding race

American motor retailer AutoNation said on Tuesday it had withdrawn its offer for the UK car dealership group Pendragon only weeks after Hedin Mobility and PAG International also dropped their joint bid.

Pendragon which operates the Evans Halshaw and Stratstone brands agreed last month to an initial bid by Lithia which originally offered £250 million for the business' car dealerships and leasing arm before increasing its offer to £397 million.

Rival bidders Hedin and Penske and the third suitor AutoNation had both offered the equivalents of 32p per share,, matching the revised offer proposed by its US rival Lithia.

Pendragon also struck a strategic partnership with Lithia which included the rollout of Pinewood, its dealer management software business, to Lithia's existing 50 UK sites and the creation of a joint venture to accelerate Pinewood's entry into the North American DMS market.

Mike Manley, AutoNation's CEO, stated, "These assets presented AutoNation with a potential opportunity to expand into a new market.  However, after further considering the opportunity, we decided not to make a formal offer. AutoNation will continue to leverage M&A, which may include opportunities within and outside the US, to expand our business portfolio in a meaningful and synergistic way, and to create value for our shareholders."

Pendragon’s shareholders will vote on Lithia’s takeover offer on October 25 at its general meeting in London.

 At 9:20, BST, Pendragon shares were down 9.43% at 30.75.